Croatia Airlines Financial Results Will Be Delayed By 1 Month

Croatia Airlines has informed the Zagreb Stock Exchange that it will delay the publication of its financial results for the first quarter of 2020. As expected, the Croatian national airline is facing severe disruption from COVID-19. So what’s next for the airline?

Croatia Airlines Airbus A319 aircraft
Croatia Airlines is only flying one rotation per day at the moment. Photo: Croatia Airlines

Why the delay?

In a statement to Simple Flying, Croatia Airlines confirmed that it had delayed the publication of its financial results until 31st May.

The new release date is later than expected, but still in line with the Capital Markets Act in Croatia. The deadline extension is a prescribed one, by the Ordinance on deadlines for the submission of financial reports in special circumstances.

Croatia Airlines also cites the “new organization of work” it has had to adopt, following measures taken by the Croatian government in response to the challenges from COVID-19.

One major measure that had a direct effect on Croatia Airlines is a ban on domestic travel in the country. This is still in place. Croatia Airlines’ international network is strongly dependent on its regional feeding routes, most of which are within its home country of Croatia. For example, the whole first wave of international departures out of the airline’s hub, Zagreb Franjo Tuđman Airport, is fed by five domestic destinations every morning: Osijek, Pula, Zadar, Split, and Dubrovnik.

Croatia Airlines Zagreb Airport
Croatia Airlines saw a 95% drop in passenger figures in April, compared to 2019. Photo: Getty Images

The slump in demand Croatia Airlines is experiencing is as severe as it has been for other airlines worldwide. In March, passenger numbers decreased by 56% compared to March 2019. In April, the decrease is as high as 95%.

Flight resumption soon

Croatia Airlines is presently operating a daily rotation to Frankfurt Airport out of Zagreb. This is to maintain connectivity to and from Croatia, for Croats who still need to return to the country.

However, in two weeks, it will begin resuming some of its other routes. Croatia will begin lifting internal travel restrictions on 11th May, and so Croatia Airlines will resume domestic flights then.

The first two routes to open will be Zagreb-Dubrovnik and Zagreb-Split, which are also the country’s busiest air corridors. Both routes are Public Service Obligation flights. Flights from Dubrovnik to Zagreb are particularly important for the country because Dubrovnik is not connected by land to the rest of Croatia.

Croatia Airlines Airbus aircraft Zagreb Franjo Tudman Airport
Croatia Airlines will resume flights to Dubrovnik and Split to feed its flights to Frankfurt. Photo: Croatia Airlines

Croatia Airlines is expecting to be hit particularly hard this year. The airline is traditionally loss-making through the winter, but profitable in the summer. The major slump in demand resulting from Covid-19 is coming at a time when the airline makes the bulk of its revenue, and when its fleet utilization is ordinarily at its maximum.

This year, the Croatian national airline was planning to undergo a regional expansion. The launch of these new routes has now been postponed, but they could end up never being launched after all.

Croatia Airlines was also in the midst of a privatization process, which started in 2013 with the interest that Garuda Indonesia showed in the airline. This has now been postponed as well. It is becoming increasingly unlikely that a strategic partner will be found for the loss-making Croatia Airlines.

How do you think smaller national airlines like Croatia Airlines will weather through Covid-19? Let us know what you think in the comments below.